Real-Time Options Flow
Options flow analysis tracks large options trades in real-time, helping you identify where institutional traders and “smart money” are positioning themselves.
What is Options Flow?
Options flow represents all options transactions occurring in the market, but we focus on:
- Large trades (>$100K premium)
- Unusual activity (volume > open interest)
- Sweep orders (aggressive multi-exchange orders)
- Block trades (negotiated large orders)
Why Options Flow Matters
Institutional Footprints
Large traders leave traces:
- Can’t hide sizeable positions
- Often have superior information
- Move markets with their trades
- Signal future price direction
Information Asymmetry
Institutions often know something you don’t:
- Upcoming earnings surprises
- M&A activity
- Analyst upgrades/downgrades
- Economic data
Understanding Flow Data
Key Columns in Flow Scanner
| Column | Description | What to Look For |
|---|---|---|
| Time | Execution timestamp | Recent vs. historical |
| Symbol | Stock ticker | Your watchlist stocks |
| Type | Call or Put | Bullish vs. bearish |
| Strike | Strike price | ITM, ATM, or OTM |
| Expiry | Expiration date | Near-term vs. LEAPS |
| Premium | Total dollar value | Size of the bet |
| Contracts | Number traded | Volume significance |
| IV | Implied volatility | High IV = expected move |
| Spot | Stock price at trade | Reference point |
| Type | Trade classification | Sweep, block, spread |
Trade Classifications
Sweeps
What: Aggressive orders taking all available liquidity across multiple exchanges
Characteristics:
- Urgent execution
- Multiple fills
- Takes offer/bid
- High conviction
Interpretation: Strong directional bet with urgency
Blocks
What: Large negotiated trades executed as single transactions
Characteristics:
- Single large print
- Negotiated price
- Often institutional
- May be hedged
Interpretation: Institutional positioning, possibly hedged
🔄 Spreads
What: Multi-leg strategies executed simultaneously
Types:
- Vertical spreads (same expiry, different strikes)
- Calendar spreads (same strike, different expiries)
- Diagonal spreads (different strikes and expiries)
Interpretation: Defined risk strategies, often sophisticated
Unusual Activity
What: Abnormal volume relative to historical patterns
Indicators:
- Volume > 2x average
- Volume > open interest
- New position opening
- Rare strike/expiry
Interpretation: Something’s happening - news, insider activity, or hedge
Flow Analysis Techniques
1. Premium Analysis
Focus on total dollar commitment:
- >$1M: Institutional size
- $500K-$1M: Large trader
- $100K-$500K: Significant retail or small institution
2. Strike Selection
What strikes tell you:
- Deep ITM: High conviction, stock replacement
- ATM: Expecting movement, highest leverage
- Far OTM: Lottery tickets or hedges
3. Expiration Timing
Time horizons reveal intent:
- 0-7 DTE: Event-driven (earnings, data)
- 30-45 DTE: Swing trades
- >90 DTE: Position trades or hedges
4. Sentiment Aggregation
Overall market mood:
- Call/Put ratio by premium
- Bullish vs. bearish flow
- Sector rotation patterns
Using Optionomics Flow Scanner
Real-Time Features
Live Updates:
- Trades appear within seconds
- Color-coded by type
- Audio alerts available
- Auto-refresh every second
Filtering Options:
- Minimum premium ($100K, $500K, $1M)
- Specific symbols or sectors
- Call/Put only
- Expiration ranges
- Trade types (sweeps, blocks)
Sorting Capabilities:
- By premium (largest first)
- By time (most recent)
- By volume/OI ratio
- By implied volatility
Flow Visualization
Heat Maps:
- Strike vs. expiration grid
- Color intensity = premium
- Identify clustering
Flow Charts:
- Overlay flow on price charts
- See trades at price levels
- Correlate with price action
Interpreting Common Patterns
Bullish Patterns
1. Call Sweeps Above Ask
- Aggressive call buying
- Taking ask price
- Often before breakouts
2. Put Selling at Support
- Collecting premium
- Confident in support level
- Bullish on bounce
3. Call Spread Buying
- Defined risk bullish bet
- Expects specific move size
- Professional approach
Bearish Patterns
1. Put Sweeps Below Bid
- Aggressive put buying
- Hitting the bid
- Expects quick decline
2. Call Selling at Resistance
- Fading the rally
- Collecting premium
- Expects rejection
3. Protective Put Buying
- Large put purchases
- Portfolio hedging
- Institutional protection
Neutral/Complex Patterns
1. Straddle/Strangle Buying
- Expecting big move
- Direction unknown
- Event-driven (earnings)
2. Iron Condor Selling
- Range-bound expectation
- Collecting premium
- Low volatility bet
Advanced Flow Analysis
Relative Value
Compare flow to:
- Historical averages
- Market cap ratios
- Sector patterns
- Index flow
Cross-Asset Correlation
Look for:
- Bond/equity flow divergence
- Commodity/stock correlations
- Currency hedging patterns
- VIX/SPX relationships
Time-Based Patterns
- Opening drive (9:30-10:00)
- Lunch lull (12:00-13:00)
- Power hour (15:00-16:00)
- Friday expiry rolls
Common Flow Setups
Setup 1: Earnings Whisper
Signal: Unusual call activity 1-3 days before earnings Action: Consider similar position or straddle Risk: Could be hedge against short stock
Setup 2: Accumulation Pattern
Signal: Consistent daily buying same strike/expiry Action: Join the accumulation Risk: Could be closing existing position
Setup 3: Sweep Cluster
Signal: Multiple sweeps in short timeframe Action: Quick entry in direction Risk: Fast reversal possible
Risk Management with Flow
Don’t Blindly Follow
- Consider your risk tolerance
- Size positions appropriately
- Use stops/targets
- Understand the “why”
Hedging Considerations
Large trades might be:
- Hedges against stock positions
- Part of complex strategies
- Closing existing trades
- Tax-related transactions
Flow Trading Best Practices
- Combine with Technical Analysis: Confirm with charts
- Check the News: Look for catalysts
- Monitor Greeks: Understand the risk
- Track Success: Keep trade journal
- Start Small: Learn patterns first
- Use Alerts: Don’t chase, prepare
Optionomics Flow Tools
Smart Filters
- AI-detected unusual activity
- Institutional size only
- Momentum trades
- Hedging activity
Analytics Integration
- Flow + gamma exposure
- Flow + dark pool data
- Flow + technical levels
- Flow + AI insights
Historical Flow
- Review historical flow patterns
- Success rate analysis
- Pattern recognition
- Correlation studies
Case Studies
Case 1: NVDA Earnings Beat
- Detected: $5M call sweeps 2 days before
- Result: 10% gap up post-earnings
- Lesson: Large, aggressive flow before events
Case 2: Bank Sector Rotation
- Detected: Massive XLF call buying
- Result: 3-month sector outperformance
- Lesson: Sector flow indicates rotation
Next Steps
Master options flow trading:
Remember: Options flow is one tool among many. Combine with other analysis methods for best results. Past flow patterns don’t guarantee future outcomes.
